GetThisDone wrote:
Chief Economist: Usually,
the release of economic data about higher-than-expected growth in the Gross Domestic Product (GDP) results in an increase in stock prices. However, this quarter, the release of data about strong GDP growth is most likely to result in a decrease rather than an increase in stock prices.
Robust GDP growth will lead to higher interest rates, increasing the attractiveness of bonds and causing a shift of capital from equity to debt securities. In the above argument, the statements in boldface play which of the following roles?
A. The first acknowledges a consideration against the main conclusion of the chief economist; the second is that conclusion.
B. The first is a pattern of cause and effect that the chief economist predicts will not hold in the case at issue; the second offers a consideration in support of that prediction.
C. The first is a generalization that the chief economist accepts as true; the second is a consequence that follows from that generalization.
D. The first is evidence that the chief economist provides in support of a certain prediction; the second is that prediction.
E. The first is a pattern of cause and effect that the chief economist predicts will be repeated in the case at issue; the second acknowledges a circumstance in which that pattern would not hold.
Main CR Qs link -
https://gmatclub.com/forum/cr-qs-600-700 ... 31508.htmlOFFICIAL EXPLANATION
The chief economist begins his argument by describing the usual relationship of cause and effect. Thus, the first statement in boldface represents a generalization that the chief economist accepts as accurate. The economist then goes on to conclude that this time, however, the usual cause-and-effect relationship will not hold and strong figures of the GDP will cause a decrease rather than an increase in stock prices. To support this conclusion, the economist offers evidence explaining how strong GDP figures may lead to lower stock prices. Therefore, the second statement in boldface represents evidence that supports the main conclusion of the economist.
(A) This answer choice correctly describes the role of the first statement but incorrectly states that the second statement in boldface represents the conclusion of the economist rather than the evidence that supports that conclusion. Remember, the conclusion of the economist is that strong GDP figures will result in a decrease rather than an increase in stock prices.
(B) CORRECT. This answer choice correctly identifies the role of each of the two parts in boldface. The first part represents a generalization that is typically accurate but will not be repeated in the case at issue. The second portion presents evidence in support of the economist’s prediction.
(C) This answer choice correctly describes the role of the first portion but mistakenly states that the second part in boldface follows from this generalization. The second statement in boldface presents evidence that supports the opposite effect from that described in the first portion. Namely, the economist claims that this time, stock prices will decrease rather than increase, as would be usual.
(D) This answer choice incorrectly states that the first portion supports rather than weighs against that economist’s prediction. In addition, this answer choice incorrectly states that the second portion in boldface represents the economist's prediction rather than evidence supporting it.
(E) This answer choice incorrectly states that the first statement will be repeated in the case at issue. Remember, the economist argues that the usual pattern will not hold this time. The second statement is correctly described as acknowledging a circumstance in which the usual pattern will not hold.